Diabatic storage dissipates much of the heat of compression with intercoolers (thus approaching isothermal compression) into the atmosphere as waste; essentially wasting, thereby, the renewable energy used to perform the work of compression. Upon removal from storage, the temperature of this compressed air is the one indicator of the amount of stored energy that remains in this air. Consequently, if the air temperature is low for the energy recovery process, the air must be substantially re-heated prior to expansion in the turbine to power a generator. This reheating can be accomplished with a natural gas fired burner for utility grade storage or with a heated metal mass. As recovery is often most needed when renewable sources are quiescent, fuel must be burned to make up for the wasted heat. This degrades the efficiency of the storage-recovery cycle; and while this approach is relatively simple, the burning of fuel adds to the cost of the recovered electrical energy and compromises the ecological benefits associated with most renewable energy sources. Nevertheless, this is thus far the only diabatic system which has been implemented commercially.

The McIntosh, Alabama CAES plant requires 2.5 MJ of electricity and 1.2 MJ lower heating value (LHV) of gas for each megajoule of energy output, corresponding to an energy recovery efficiency of about 27%.[5] A General Electric 7FA 2x1 combined cycle plant, one of the most efficient natural gas plants in operation, uses 6.6 MJ (LHV) of gas per kW–h generated,[6] a 54% thermal efficiency compared to the McIntosh 6.8 MJ, at 27% thermal efficiency.

Isothermal compression and expansion approaches attempt to maintain operating temperature by constant heat exchange to the environment. They are only practical for low power levels, without very effective heat exchangers. The theoretical efficiency of isothermal energy storage approaches 100% for perfect heat transfer to the environment. In practice neither of these perfect thermodynamic cycles are obtainable, as some heat losses are unavoidable.

A different, highly efficient arrangement, which fits neatly into none of the above categories, uses high, medium and low pressure pistons in series, with each stage followed by an airblast venturi pump that draws ambient air over an air-to-air (or air-to-seawater) heat exchanger between each expansion stage. Early compressed air torpedo designs used a similar approach, substituting seawater for air. The venturi warms the exhaust of the preceding stage and admits this preheated air to the following stage. This approach was widely adopted in various compressed air vehicles such as H. K. Porter, Inc's mining locomotives[7] and trams.[8] Here the heat of compression is effectively stored in the atmosphere (or sea) and returned later on.

The storage vessel is often an underground cavern created by solution mining (salt is dissolved in water for extraction)[10] or by utilizing an abandoned mine. Plants operate on a daily cycle, charging at night and discharging during the day.

Compressed air energy storage can also be employed on a smaller scale such as exploited by air cars and air-driven locomotives, and also by the use of high-strength carbon-fiber air storage tanks. However, when compressed air is stored at room temperature this stored air, in general, contains the same amount of energy per pound as uncompressed room temperature air. The considerable amount of energy used to compress this air is not stored there if the air is allowed to reduce to room temperature. Therefore, to obtain substantial energy from the expansion of this stored room temperature compressed air a heat reservoir must be provided to supply the needed energy. This can be challenging in mobile applications.
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Template:Patent, awarded in January 2013, describes a turbo-expander machine that offers both high efficiency energy recovery and high power output.
The turbo-expander utilizes no fuel combustion, but instead is powered by the recovery of atmospheric heat (e.g., the wasted heat of compression as described in the Diabatic classification).
When combined with renewable energy powered air compression, such an energy recovery machine would enable a compressed air storage and recovery methodology that is both cost-effective and eco-friendly.

Since about 1990 several companies have claimed to be developing compressed air cars, but none are available. Typically the main claimed advantages are: no roadside pollution, low cost, use of cooking oil for lubrication, and integrated air conditioning.

The time required to refill a depleted tank is important for vehicle applications. "Volume transfer" moves pre-compressed air from a stationary tank to the vehicle tank almost instantaneously. Alternatively, a stationary or on-board compressor can compress air on demand, possibly requiring several hours.
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Huntorf, Germany in 1978, and McIntosh, Alabama, U.S. in 1991 commissioned hybrid power plants.[9][13] Both systems use off-peak energy for air compression. The McIntosh plant achieves its 24-hour operating cycle by burning a natural gas/compressed air mix.

The Iowa Stored Energy Park (ISEP) will use aquifer storage rather than cavern storage. The displacement of water in the aquifer results in regulation of the air pressure by the constant hydrostatic pressure of the water. A spokesperson for ISEP claims, "you can optimize your equipment for better efficiency if you have a constant pressure."[13] Power output of the McIntosh and Iowa systems is in the range of 2–300 MW.[14]

Additional facilities are under development in Norton, Ohio. FirstEnergy, an Akron, Ohio electric utility obtained development rights to the 2,700 MW Norton project in November, 2009.[15]

Deep water in lakes and the ocean can provide pressure without requiring high-pressure vessels or drilling into salt caverns or aquifers.[16] The air goes into inexpensive, flexible containers such as plastic bags below in deep lakes or off sea coasts with steep drop-offs. Obstacles include the limited number of suitable locations and the need for high-pressure pipelines between the surface and the containers. Since the containers would be very inexpensive, the need for great pressure (and great depth) may not be as important. A key benefit of systems built on this concept is that charge and discharge pressures are a constant function of depth. Carnot inefficiencies can thereby be reduced in the power plant. Carnot efficiency can be increased by using multiple charge and discharge stages and using inexpensive heat sources and sinks such as cold water from rivers or hot water from solar ponds. Ideally, the system must be very clever—for example, by cooling air before pumping on summer days. It must be engineered to avoid inefficiency, such as wasteful pressure changes caused by inadequate piping diameter.[17]

A nearly isobaric solution is possible if the compressed gas is used to drive a hydroelectric system. However, this solution requires large pressure tanks located on land (as well as the underwater air bags). Also, hydrogen gas is the preferred fluid, since other gases suffer from substantial hydrostatic pressures at even relatively modest depths (such as 500 meters).

E.ON, one of Europe's leading power and gas companies, has provided €1.4 million (£1.1 million) in funding to develop undersea air storage bags.[18][19]Hydrostor in Canada is developing a commercial system of underwater storage "accumulators" for compressed air energy storage, starting at the 1 to 4 MW scale.[20]
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